Berkshire Hathaway, led by Warren Buffett, becomes the first U.S. company outside of tech to reach a $1 trillion market value.

On Wednesday, Warren Buffett's company reached a $1 trillion market capitalization, making it the first non-technology company in the U.S. to achieve this milestone.

In 2024, the Omaha-based conglomerate's shares surged more than 28%, outpacing the S&P 500's 18% increase. The $1 trillion milestone was achieved just two days before Warren Buffett's 94th birthday.

On Wednesday, the shares reached a high of $699,440.93, surpassing the $1 trillion mark, according to FactSet.

Unlike the other six trillion-dollar companies (Apple, Nvidia, Microsoft, Alphabet, Amazon, Meta), Berkshire stands out with its focus on old-economy businesses such as BNSF Railway, Geico Insurance, and Dairy Queen. However, its substantial position in Apple has also contributed to its recent growth.

In the 1960s, Buffett acquired control of Berkshire, a struggling textile business, and transformed it into a diversified empire with operations in insurance, railroad, retail, and energy. Today, Berkshire boasts an unparalleled balance sheet and cash reserves.

Recently, Buffett has been in a defensive stance, selling off a significant portion of his Apple stock and increasing Berkshire's cash reserves to a record $277 billion by the end of June.

Buffett's recent moves have served as a wake-up call to some of his followers on Wall Street, who believe he saw some things he did not like about the economy and market valuation.

The amount of cash that Berkshire holds in short-term Treasury bills, valued at $234.6 billion at the end of the second quarter, surpasses the amount owned by the U.S. Federal Reserve.

It is difficult to determine why investors are awarding Berkshire the $1 trillion title today, whether it is a prediction of the American economy and the company's diverse set of businesses benefiting if it continues to perform well or whether they view Berkshire as a secure haven that will generate consistent income in the face of an uncertain economic climate.

High price tag

The median price of a home in the U.S. is 68% lower than the price of Berkshire's Class A shares.

Buffett has never split the stock, as he believes that the high share price attracts and retains more long-term, quality-oriented investors. Graham, Buffett's protégé, has stated that many Berkshire shareholders use their stock as a savings account.

In 1996, Berkshire Hathaway issued Class B shares at a price of one thirtieth of a Class A share to accommodate smaller investors seeking a smaller stake in Buffett's performance.